Ginnie Mae guaranteed a total of $507.46 billion of single-family mortgage-backed securities in 2016, its biggest annual volume ever, according to a new analysis and ranking by Inside FHA/VA Lending. That was up 16.4 percent from the agency’s previous record of $435.80 billion set in 2015. (Those figures include MBS backed by FHA home-equity conversion mortgages, which are not included in the table below or in the rankings on pages 3-5.) In 2016, Ginnie guaranteed $497.03 billion of MBS backed by traditional forward mortgages, also a record, which was up 16.9 percent from the previous year. The biggest factor in last year’s record-setting production was the boom in VA lending, particularly VA refinance loans. Issuers securitized a record $203.03 billion of VA loans last year, up 33.0 percent from the 2015 total. Some 54.3 percent of those loans were refinance transactions. Total VA refi loan ... [4 charts]

Industry stakeholders are anticipating an FHA insurance premium reduction soon from the Department of Housing and Urban Development. Sources say a 25-basis-point premium reduction is in the works and HUD Secretary Julian Castro may announce it during his farewell address. His last day in office is Jan. 20, President-elect Donald Trump’s inauguration day. A HUD representative declined to comment on the report citing department policy against “commenting on rumors.” A number of lobbyists and consultants said they have heard similar reports but cautioned it is not a done deal. Two industry executives expressed certainty about the veracity of the report. The idea of a premium cut has been raised with neurosurgeon Dr. Ben Carson, Trump’s nominee for HUD secretary, who will have his Senate confirmation hearing on Jan. 12. A mortgage insurance premium reduction at this time would ...

The FHA this year will focus mainly on the completion and implementation of the Defect Taxonomy to help lenders easily identify and categorize loan defects found in FHA-insured loans. At least that was the plan announced by the outgoing Obama administration. The agency urged lenders to be on the lookout for detailed information about Defect Taxonomy and other process improvements in the coming months. “As we begin to implement these changes and transition from current processes, some lenders may experience a temporary decrease in loans selected for review,” the FHA noted in Lender Insight, which updates lenders on the latest rulemakings and policy changes. Announced in June last year, Defect Taxonomy is part of the Blueprint for Access, which embodies three core concepts: identifying a defect, capturing the sources and causes of a defect, and assessing the ...

The initial material defect rate for FHA-insured loans targeted for a quarterly post-endorsement review increased to 53 percent in the third quarter from 50 percent in the previous quarter, according to test results. Published in the FHA’s quarterly Lender Insight, the results were from post-endorsement technical reviews conducted between July 1, 2016, and Sept. 30, 2016, on 5,973 FHA loans. The initial material defect rate appears to be trending upward since June 2016, when it had stayed flat at 47 percent over the previous eight quarters. The latest loan sample was comprised of 75 percent purchase loans, 10 percent streamline refinances, 7 percent rate-and-term refis, and 8 percent Home Equity Conversion Mortgage loans. Of the targeted loans, 23 percent met FHA requirements but an equal percentage were found to be “deficient,” while 12 percent were deemed “unacceptable” due to ...

The lack of experience in housing and mortgage financing matters could become a sticking point with Dr. Ben Carson, President-elect Donald Trump’s nominee for Housing and Urban Development secretary, during his Senate confirmation hearing on Jan. 12, according to stakeholders. “Democrats, in particular, will want to know his credentials and positions on various housing and enforcement issues,” said an industry observer. “There is doubt whether Carson can address such questions positively and specifically. ‘Living for a while in public housing’ is not a qualification to run HUD or oversee FHA for that matter.” However, Trump’s selection of Carson and other conservatives for cabinet positions signals his intent to govern from the right – a complete reversal from the eight years under President Obama. Notwithstanding his lack of housing expertise, Carson is on the path to promote and ...

With industry and lawmakers focused on the confirmation hearing next week of President-elect Donald Trump’s nominee to head the Department of Housing and Urban Development, speculation as to who might become Dr. Ben Carson’s top deputy and FHA commissioner has apparently eased. After weeks of speculation, the list for HUD deputy secretary is down to three rumored contenders: Brian Montgomery, former assistant secretary and FHA commissioner; Pam Patenaude, president of the J. Ronald Terwilliger Foundation for Housing America’s Families; and Rick Lazio, a former congressman from New York and a housing finance attorney. Like Montgomery, Patenaude has experience at HUD, serving as assistant deputy secretary for field policy and management. She has extensive experience in housing as an executive vice president at Urban Land Institute and director of housing policy with the ...

United Shore Financial Services of Troy, MI, has agreed to pay $48 million to resolve allegations of FHA-related fraud, adding to the more than $7 billion in settlements and judgments the Department of Justice has collected since 2009. United Shore, parent company of United Wholesale Mortgage and Shore Mortgage, was accused of improperly originating mortgages and falsely certifying compliance with FHA requirements. Originated between Jan. 1, 2006, and Dec. 31, 2011, the loans eventually turned bad, resulting in significant losses to the FHA insurance fund. The complaint did not specify the number and total amount of the bad loans United Shore originated or the size of FHA’s losses on those loans. United Shore was charged with violation of the False Claims Act, becoming the latest financial institution to join a growing list of FHA lenders that have opted to settle, rather than litigate, ...

VA Extends Making Home Affordable Program. The Department of Veterans Affairs has extended the Making Home Affordable program to Oct. 1, 2017. The program was set to expire on Jan. 1, 2017. USDA Approves NewFed Mortgage to originate Section 52 Guaranteed Rural Housing Loans. The U.S. Department of Agriculture has approved NewFed Mortgage Corp., a multi-state residential mortgage lender, to originate USDA loans. Based in Danvers, MA, retailer NewFed offers FHA, VA, USDA, conventional and jumbo mortgage products. Reviews Genworth Financial’s Proposed Sale to Chinese Conglomerate. Fannie Mae has approved Arch Capital’s acquisition of ...

The FHA’s 203(k) Property, Repair and Rehabilitation program saw a significant increase in activity in the third quarter of 2016, both relative to the previous quarter and from the same period a year ago. Origination of FHA-insured fixer-upper loans jumped 16.2 percent from the previous quarter, bringing the nine-month production total to $2.4 billion. On a year-over-year basis, volume rose 6.9 percent. The top five FHA 203(k) lenders saw a 52.5 percent increase in originations in the third quarter, totaling $202.1 million. Year-over-year, production by the same group was off by 13.1 percent. Purchase loans accounted for $2.2 billion of 203(k) mortgages originated by lenders over the nine-month period while refinance rehab loans accounted for $237.9 million. Billion-dollar weather and climate disasters may have contributed to the surge in 203(k) business. As of September 2016, 12 weather and ... [Chart]

The Congressional Budget Office is looking for ways to reduce the budget impact of government-backed mortgage programs and recommends that Fannie Mae and Freddie Mac increase their guarantee fees and/or significantly lower their loan limits. But the CBO admits those changes would result in raising the cost to borrowers and could potentially restrain the housing market. Under CBO scorekeeping, MBS guarantees provided by the two government-sponsored enterprises from 2017 to 2026 will cost the government $12 billion. Reducing subsidies also would help renew private sector participation in the secondary market, the CBO said. It proposes...